Icici Bank Deposit Rates In India

RBI boss is back to hawkish ways.

RBI

abbr. Baseball
runs batted in

Noun 1. rbi – a run that is the result of the batter’s performance; “he had more than 100 rbi last season”
run batted in
 says biggest risk to economy stems from CAD

THERE is little cheer for home and car loan seekers in the Reserve
Bank of India’s ( RBI) monetary policy for 2013- 14, announced on
Friday, as the interest rate was cut by a meagre 0.25 per cent and the
cash reserve ratio (
CRR

CRR Congestion Revenue Rights
CRR Center for Reproductive Rights
CRR Certified Realtime Reporter
) was kept unchanged on concerns of inflation.

The lowering of the short- term lending ( repo) rate to 7.25 per
cent from 7.50 per cent was lowest since May 2011.

Between April 2012 and February 2013, the weighted average lending
rates of banks has come down by 36 basis points to 12.17 per cent.
Transmission of RBI’s signals to the end consumer is partly
hampered by banks’ challenges in raising cheap deposits and dealing
with their bad loans.

Pratip Chaudhuri, chairman,
State Bank of India

, said that there is
no scope for a lending rate cut now. His views were shared by other
bankers as well who ruled out the possibility of rate cut in the
immediate run.

ICICI Bank chief Chanda Kochhar conceded that the rates in the
certificate of deposits have been going down but termed it as a cyclical
phenomenon. ” The present downward movement in deposit rates will
not be sustained.

And a lending rate cut will depend only on the movement of
cost of
funds

,” she said.

RBI governor D Subbarao defended his decision to hold CRR. ”
The view that the Reserve Bank can improve liquidity only by cutting the
CRR is mistaken,” he told reporters at the customary post- policy
interaction.

” We have not cut the CRR because we believe that the
liquidity deficit to the extent that it exists is not because of
structural reasons.” He gave out granular details of liquidity
available with the banks saying they are carrying ` 3.5 trillion in
excess of statutory liquidity requirement holdings, ` 21,000
crore
 of rupees (which is nearly $5,000,000) s>.

Noun 1. crore – the number that is represented as a one followed by 7 zeros; ten million
 in
unutilised export credit refinancing and ` 1.4 trillion in marginal
standing facility.

The subtext of the monetary policy statement0 is that the
government has exhausted easier options to boost economic growth and RBI
is no longer going to waffle in its inflating- busting mandate.

In addition to the banking system’s problems and damage to
business sentiment caused by governance issues, RBI believes that 2013-
14 is going to be another year of relatively slow growth. RBI’s
forecast is that the economy will grow 5.7 per cent this fiscal, lower
than the finance ministry’s projection of 6.1- 6.7 per cent. The
Prime Minister’s Economic Advisory Council forecast that the
economy would grow by 6.4 per cent.

” The Reserve Bank’s baseline projection of
GDP
 (guanosine diphosphate): see guanine.
 growth
for 2013- 14 is 5.7 per cent … The bank’s current assessment is
that activity will remain subdued during the first half of this year
with a modest pick- up in the second half subject to appropriate
conditions ensuing.” Describing the high current account deficit (
CAD) as the biggest risk to the economy, RBI said any further
deterioration of CAD could result in its policy reversal stance. ”
The biggest risk to the economy stems from CAD, which last year was
historically the highest … Monetary policy will also have to remain
alert to the risks on the account of CAD and its financing, which could
warrant a swift reversal of the policy stance.”

Bankers say the 0.25% cut in repo rate by the Reserve Bank does not
help them bring down their cost of funds

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